The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Banking

Portugal’s banks are impatient for recovery

Bankers insist they want to lend more to the country’s SMEs, by far the largest private-sector employers in the nation. In the meantime, they are concentrating on growing their more profitable overseas businesses.

Not all the news in Portugal is bad. Austerity has led to more than 2% of the population emigrating over the past two years. Economic growth remains elusive. The country’s main trading partners in the EU are barely faring any better.

Local economists insist, though, that the international mobility that has been more or less synonymous with Portuguese society since Vasco de Gama set sail for India in the 15th century will lead Portugal – and its leading banks – to a brighter future.

It is this mobility that has helped to underpin the single most striking feature of the Portuguese recovery story: the surge in its exports and the accompanying decline in its current account deficit. Having peaked at 12.6% of GDP in 2008, according to Banco de Portugal data, this deficit fell to 6.4% in 2011 and to just 1.8% in the first three quarters of 2012.

Pivotal to the successful Portuguese exports story, however, has been the speed with which the country’s corporate sector has looked beyond Spain and the EU to new markets – most notably to Portuguese-speaking countries in Latin America and Africa.

José Brandão de Brito, chief economist at Millennium BCP in Lisbon, says that rising exports have been underpinned chiefly by a reduction in unit labour costs, driven by a combination of increased productivity and declining wages.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree